Wednesday, February 23, 2011

In conversation with lab-mates Mike, Reid, and Shawn, someone (we cannot reconstruct who) proposed a brilliant and counterintuitive solution to the problem of redistribution of wealth. It requires no wellfare, and is implemented entirely through the application of a tax break. I believe that, in the biz, this is considered a WIN. Here's the idea:

Make all domestic purchases tax deductible.
Only tax wealth (as opposed to income).

Bam! Let's break down the consequences of this.
1. We have effectively incentivized spending, use it or lose it (though not more of it than you do already)
2. The wealthy are the most motivated to spend (but it's still good to be wealthy cause you can get more and cooler stuff!)
3. Making the purchases you need to improve your life or expand your business helps you save money on your tax return
4. In the worst case it degenerates to the current situation: say no one spends anything for a year (awful for the economy and insanely unlikely, but hey) then everyone pays taxes in the tax bracket they are in without any spending deductions and the government gets the same amount of tax income it does now
5. In the hilarious case, everyone wants to be minimally taxed so they distribute income equally among all people and everyone pays the tax bracket of the mean amount wealth in the government. The government makes the least money when it's the needed the least - in the egalitarian utopia the people created in order to evade taxation.

The basic economic intuition behind why this would be good is that spending stimulates the economy. This is relatively well understood, and the government is constantly doing things like tweaking interest rates in order to incentivize spending and keep businesses rolling. A common problem in economic models is that while poor people spend just about all their money on account of needing to be alive and that costing money, rich people end up saving most of their money, which essentially removes it from the economy. Money that sits around doesn't do anything to increase demand for products, provide jobs, or any such goodness. So more money actually cycling in the economy is definitely good, and this suggestion does that without any (discernible to me thus far) negative consequences. Please tell me why I am wrong, otherwise I am running for some major political office tomorrow, on the platform of "Everything is tax deductible and incidentally watch your economy become a perfect fountain of efficiency productivity and wealth redistribution".

Tuesday, February 22, 2011

EDIT: This post is badly written and reasoned. I have other better opinions about this that I will one day expound upon. I'm leaving this up as a sort of "history of Rory's thoughts" post, but it no longer reflects my views on this subject.

Today we will settle once and for all the argument about entitlement programs. People hate these for all sorts of reasons. Commonly cited:

1. We can't afford them
2. Big Government is bad
3. Government shouldn't enforce redistribution of wealth (related to 2); leave charity to the choice of individuals
4. Moral Hazard (Perverse incentive encouraging them what are poor not to do work)

In brief, my responses to 1-4 are as follows:

1. As they are now, agree
2. what does that even mean?
3. I am too angry to briefly address this, but it is stupid and I can prove it with Science and also Reason (related to 2)
4. Sure, there is moral hazard, but you know what else is morally hazardous? allowing innocent people to suffer and/or die when you could have given up money to stop it (related to 3, and 2)

Later, when I am less angry, I will write some stuff about how misguided beliefs 2 through 4 are. For now, I will content myself with my proposal to remove the legitimate objection (that's number 1 for those of you who werent counting, or can't)

Once again, I propose a rights based approach. Here's the deal: the thing I care about most is that people who are poor don't die or get sick or get injured on account of being poor. I think that when that happens it is bad and also not good. That's my primary concern. So I figure, we should do with other entitlement programs what we've done with our most successful entitlement programs to date (education and the post), give them to everyone, everywhere, and make everyone, everywhere, pay for them.

In practice, I think it would look something like this:

1. Mail everyone a multi-vitamin with the stuff that peeps actually need in it (as much as medical science can anyway)
2. Mail everyone food stamps or maybe even actual food to the point where every person has the means of acquiring enough calories to be healthy
3. Guarantee FREE emergency and routine medical care (though only for bottom shelf medicines, treatments, &c)
4. Provide some baseline housing allowance to all people, payed directly from the government to the provider of housing (so the money can't be redirected to, you know, drugs or the like)

Please note that this system would apply equally to everyone. Any purchases you made above and beyond this would of course be up to you, but there would be no reason for (for instance) health insurance companies to provide a basic coverage package, though there's still plenty of incentive to buy health insurance if you want to benefit from the pinacle of medical science and have the money to do so. Furthermore, the government would be paying hospitals for all of their procedures, rather than forcing them to eat the cost of emergency medical care for the uninsured (as they currently do). Likewise, the rich could put their housing allowance towards their second or third home, and would benefit as much (monetarily) as the poorest people. The rich would also get their vitamins and food stamps, but would have the opportunity to go out and pay the premium on top of those food stamps to get nicer food or eat at restaurants and the like.

How would we pay for this? Taxes! and yes, stepped taxes, that means that the rich will pay out more in taxes than they take in in government living support. On the upside, they will never ever ever have to feel guilty when they don't want to give a beggar money, on account of they KNOW BEYOND A SHADOW OF A DOUBT that that person has enough food, nutrients, shelter, and medical care.

Incidentally, if we do this we can get rid of social security, medicare and medicade, which would be nice. Since we're not providing any income or luxuries, people would still be motivated to find work, but if they didn't find work, no one's health would be at risk. As a bonus, no one would ever die from neglect-by-society which, you know, could be cool. Let me know what you think, and feel free to point out how I might be an idiot and am also almost certainly a communist.

EDIT: How does this save us money on entitlements?

This saves us money in a few key ways. First of all, it lets us get rid of social security. Secondly, it dramatically reduces the benefits provided to people (no cell phones, no cash-per-kid). Thirdly, it eliminates the possibility of fraud and all of the resources that attempting to combat that would take up. Fourthly, it simplifies the system, greatly reducing the administrative cost of running it. The administration required to support such a system would basically be post office infrastructure, and maybe a way to connect landlords and their client's housing allowance.

Wednesday, February 16, 2011

I read this ruling on the constitutionality of healthcare, which I found entirely fascinating. I went into it ignorantly believing the foundational logic to be absurd and the wrongness of the ruling to be obvious. It turns out that there are other smart people around, and one of them wrote this. It also gives a super interesting (in my opinion) window into the way this part of our legal system works. I contrast it to this ruling which comes to largely the same conclusion without nearly as much intelligence and style.

Here's what I take away from the rulings:
1. It seems quite likely that the provision requiring the purchase of health insurance will be struck down as an unconstitutional overreach of the commerce clause.

2. This problem could have been avoided in a number of essentially equivalent ways. The arguments that the debate is essentially formalistic are sound, but the formal difference lead to practical difference down the road when legal precedent is considered, so the clause really must be struck down.

3. It seems unlikely to me that the rest of the bill will also be destroyed, though frankly I'd say that the best defense against that would be to amend the clause in question to avoid the formalistic issues. A tax, set at the lowest costing health insurance plan available, and applied as a subsidy to the health insurance plans of all americans would be an alternative that was likely to be entirely legal. It would be rather similar to social security actually, except, you know, fiscally sound.

Wednesday, February 2, 2011

Last post I discussed Wolff's book In Defense of Anarchism and promised to talk about a potential way out of his assertion that no practical government can have moral legitimacy. Now I'm following through on that promise. So Wolff puts forth that Unanimous Direct Democracy can have authority without undermining personal moral autonomy. Within that section, he points out that even arbitration can be codified within such a system. Those two points are the basis for my idea of a practical form of governance by practical direct democracy. I need a catchy term for this form of government. Here are the ingredients I think we need to make this work.

1. Unanimous passage of items in a bill of rights.
2. Unanimous passage of a process for ascertaining the best ways to guarantee these rights.

It seems to me that the vast majority of politics isn't about the right thing to do, it's about the right way to do it. Democrats and Republicans alike agree that people have a right to life, for instance, and that the taking of a life without due process and control is unacceptable, they disagree on the best way of ensuring that life taking is minimized. In our government, there is no mechanism for finding the best way, testing enacted laws to verify they are in fact improving the situation, or rigorously studying the impact of our legal strategies at all.

I think that a large and diverse group of people could agree upon a significant number of fundamental rights if asked to consider merely the right thing without concern for its implications or practical significance.

Then comes the tricky part. This group of people would need to agree on a mechanism for developing procedures to protect the rights they have codified. This is akin to an arbitration process. Personally, I would advocate the scientific method. Allow people to propose mechanisms for enhancing protections of the codified rights. Require rigor in these proposals. In other words, place the burden on the bill writer to demonstrate that the bill does not contradict existing rights, and has a plausible mechanism for enhancing the support or protection of one of those rights, and provides metrics by which the impact of the bill could be measured. Select several proposals at random, and apply them to test groups determined in an appropriately random and statistically rigorous manner. If the law is found to violate existing rights by some unintended consequence it is immediately abolished. If, after an appropriate trial period, the law is found not to significantly improve the metric(s) it provided, it is abolished. If it succeeds in improving its metrics appropriately, its scope is progressively expanded, its impacts reverified, and its consistency with the bill of rights reevaluated, until such time as it is implemented nationwide. Following nationwide implementation, bills are periodically reviewed for consistency with the bill of rights (though their efficacy is no longer tested as there is no control population).

I think that a large number of people could agree to this strategy or one like it, and I think that such a governance strategy would create a government capable of developing a recognizable and appropriately far reaching legal code without undermining the moral autonomy of the population. Let's call it a Constitutional Anarchy. This is my current best effort with regards to an ideal form of governance, and it is basically going to be the yardstick by which I judge ongoing legal and political discussions in the US.

Here are the questions I would ask of any law or political policy.

1. Does it attempt to protect or enhance a universally acknowledged right? (answer should be yes)
2. Does it impede any universally acknowledged rights? (answer should be no)
3. Does it provide rigorous support for its chosen strategy? (answer should be yes)
4. Does it provide for the measurement of its impact, and repeal if shown to be ineffective? (answer should be yes)

I think those are in order of importance, but I'd say that giving the wrong answer to any of 1-3 should be a deal breaker.

So, that's the title of a book I've just been reading. It basically consists of a formal evaluation of Democracy's claim to increased inherent goodness over other forms of government. Its initial premise is that every person is morally autonomous, and its conclusion is that there is no morally valid form of government, and that Democracy is no better than anything else in this regard. Here are some interesting highlights:

1. Direct Unanimous Democracy is the only way to reconcile moral autonomy with state authority. In other words, the only morally valid state is one which only has laws agreed upon by every single one of its citizens.

2. There is no extant democracy which is even internally consistent. In other words, majority voting systems can produce results that are internally inconsistent. This is related to Arrow's Impossibility Theorem which is a super interesting result demonstrating the impossibility of generating reasonable voting systems. Direct Unanimous Democracy is not subject to these challenges because, well, it only does something if every single person agrees.

The basic argument of the book is that we are all obliged to carefully consider what is right and wrong and act accordingly, and that acknowledging the authority of another is tantamount to abandoning that responsibility. In other words, if you say someone is an authority, you are saying that you should do what they say because they are the ones saying it, not because you agree with them or whatever. If you grant that an entity has authority, then you are saying that, within the scope of their authority, their moral judgement supersedes your own. Therefore, authority is fundamentally at odds with moral autonomy. The only way to get around this problem is to ensure that the authority in question is in fact only enforcing your own moral judgments upon you. The only way to guarantee this situation is for the authority to only enforce laws upon you to which you have explicitly agreed. That way, if you step out you're doing so against your considered moral judgement, and it is right and just that the state place you back on your proper path. It basically makes the state a giant shared conscience. Of course, direct unanimous democracy is tantamount to anarchy.

Wolff argues that this means that no practicaland morally valid government can ever be constructed. Before I read the book, I agreed with him. I think that he provides a way out of his contradiction, Which I'll discuss in my next post.